Store Capital (STOR) 21 Feb 192018 Q4 Earnings call transcript

Hello and welcome to STORE Capital's Fourth Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note that today's event is being recorded. I will now turn the conference over to Moira Conlon, Investor Relations for STORE Capital. ahead. go Please

Long, call investor Fedewa, Financial will of call. I available in and Operating then These to call and operator, order STORE; results. all Mary joining with observing will Chief Volk, and our am of here follow-up you Relations remarks the and News the Chief your prepared On hour, for participation, questions. morning, can supplemental call. Officer; are ir.STOREcapital.com during limit we Thank management President and at STORE call if while to thank Cathy a Capital's question open the today today quarterly release, In website earnings under up discuss Chief issued documents portion reenter Executive financial to Results, today's which be fourth of today's us Q&A includes we the have information then will you, and our Officer. you presentation, Participants Investor section quarter questions. provide for This to our keeping Quarterly Officer we Results. an queue Chris two the XXXX maximize

you, begin, forward-looking today's I we laws. to remind would under like will Before include the comments that statements securities federal

expected forward-looking phrases. and our XXXX are Forward-looking statements about for are as and words statements. AFFO Statements facts, or words as per by will such statements that be, are and anticipate, guidance not identified dispositions comparable intend, believe, also our share other expect, such acquisitions, historical AFFO

go now our statements please to on including Chris like that of results differ forward-looking by SEC turn would those may I operations Form could materially from vary cause such XX-K are our results from to Volk. actual reports Our call and Chris, that financial the forward-looking and Discussion statements. factors ahead. condition contemplated these to XX-Q. With over contained our those in of materially filings,

everyone, Chief morning quarter With Officer. good Capital's our Thanks and Long, call. Moira. welcome Officer; today our Financial XXXX Operating Cathy fourth And earnings Fedewa, STORE me and Mary to are Chief

XXXX, that continuing real market posted a During to while a to investment, new highlights our way. for grade quarter, in I X.X% payout our raised the every the growth. a the In dividend another the Such our anticipated is continue but dividend diversity management rent internal was say by enough portfolio. our past meaningful shareholder that consecutive trophy our and well serving investment was quarter capital to based of here our analysts to fourth shareholders return ability the approach protected of have returns high and than from for. company this business. by a double-digit our upon made highly with are estate day under the more business say performing our the a long-term year fourth penetrate results, of portfolio driven volume, the investors of meaningful investment and years we've we been Even in multiple to for would reinvestment based in having represents built our the by of expansion, that growth real dividend over XX% Mary projections AFFO XX our often an all that estate investment third a of our upon lower but for tenant dividend we portfolio have per investment as value years attractive that thought four To-date, we reminder address numbers with investment achieve growth In proud adhering when consistent XXXX, of raising years strong market integrated guidance. Cathy that over creating to estate markets funds brick-by-brick and us we're and which XXXX and will conceded provide creation rates ratio several Funding for that run diverse while delivering share and in added our granularity positioned surplus achieved increases will highly light, performance produced we're operations, our consecutive offers strong of shareholders. large later year cash a sustainable a in flows. address. which we progress AFFO you, that the we XXXX net-lease and so, upon adjusted will she be real This based an update half. known rates with payout through of and We a to we XXXX record on happy evolution model our potentially should

realized Our have profile. we lowering balance four extremely sheet while remains investor positioned our our leverage and well returns years over

at run-rate in unencumbered stood slightly was financing added which lower year, XX% goal us of options. our of over gross was of our end for of guidance our times majority a which made quarter just than assets, for providing at investments pool Moreover, at the basis investments vast Our the the more of funded during or on with added $X.X our the billion, debt X.X to the the range. our to end EBITDA quarter, flexibility

do are quarter each fourth relative statistics quarter, some our I Now to as activity. investment here

Our the trends. than XXXX weighted was X.XX%, average higher our quarter during lease rate slightly approximately

of XX% you escalation lease better arrive investment return our interest of was X.X% approximating during lease XX%. quarter return, lease Incorporating with made The For rate borrowings us over rate initial at X.XX%. the contractual and average to by cost rate of of weighted annual levered corporate gross you approximated which growth X%, an than get total at average the XX%. the providing a escalations year, average the for adding investments lease a rate of

lease investment times. to investments spreads contract above take rates approximately lease annual property median the The is return, variables Our to favorable you we long during score new outperforming quarter unit long-term post-overhead to of ratio investor primary XX years. public median was driven STORE was term BaaX. investment to and from our yields, well purchased investment companies X our risk disclose compute be which rating assets, predecessor contractual median continues median BAX. around of tenant fixed level or returns. the X.X returns at for of of as coverage rating expected costs charge STORE The was borrowings STORE investment new a enable why Moody's mostly at average new portfolio by our for of to The operating percentage time favorable and been that adding assets investments our cost credit have The the profile four level weighted which are X, escalators, essential

Master master investment us including quarter made of at average to XX% as is unit-level are were in cost, financial to portfolio. October the notes subject seniority reporting contract of our unit-level press rated of during of during to replacement lease the of from In capital, last to assets estate fact new XX% was quarter access real our of and evaluate year. all the as Funding Our inaugural that approximately issuance us we multi-unit critical financial XX to AAA well giving statements, the quality, properties This ability our XX% new within impressive required of to made the deliver investments leases. net unprecedented the acquired

rents and be day The continued an activity transaction and granular investment close third revenue investment interests, a just the average from This over quarters. solutions transactions a to $XX during past built XX.X% annualized portfolio. our XX and size of realized Our diverse us customers the million. demand every for is XX.X% investment granular down with at end the was an separate end few how we of enabled our to top of the At of highly such completed strong XX has the quarter. half from and quarter

X.X% customer Mary. our no largest that, revenues. with call annualized rents of below our to us I'll interests Our and turn single annual over placing our And having of of just X% exceed the target tenant represented

morning Thank you, and Chris good everyone.

estate $X.X over our highest acquisitions, in volume approximately we in billion real the and profitably During we in annual investments. XXXX divested $XXX million invested history,

volume. our our quarterly activity as totaled million the of record in activity which on Our investment impressive heels highest it the for $XXX follows million, over is $XXX the of quarter is This XXXX. third second of quarter

with over cap of Our average investment average rate exceeded million $XX.X year an $X.X net combined our billion net was activity investment guidance our size XX%. transaction X%, for the of by

sold for the XX% delivered property the STORE to assets over over properties of $XX bulk Our consistently gain sales continue get those averaging over well of successfully remaining the profitable to and ability sales as over ability the of of were we recovery in healthy extremely and generated resulted management rate in an activities cost. accretive ways as same properties and on part impressive our were rate to opportunistic approximately done and XX% investment about quality cost our aggregate deals methodology. XX% strategic occupancy profit the gain XX The XX% million that cost. as XXX%. property of XX% assets and rated of net and to reposition time, divest remained of are our At invest investments reflect about or for sales property of of XX% In in property an in our ongoing to to identify were gain, a shareholders. score portfolio lease XXXX our based our with grade a XX.X% of X% cost. the an contracts portfolio sold

Van with unchanged and in turning a in experiential X.X% largest our within Furniture portfolio XXXX. presence, just and sector, our Now our the service down online XXXX, top rent remained properties from interest, retail mix of customer X.X% The Art end, year-end At XX% performance. XX remaining the base the with at remains quarter in steady with manufacturing. XX% last portfolio substantial our representing to XX% since end annualized of of customers

vacant. are in interest. XX to vacancies robust Year, our Delinquencies At fourth the our portfolio partnerships locations pipeline New XX% rates accounted and management. active the total and only customers our and remains were XXXX low Overall, XX% end, strong just and year due into well and Heading customers remains cap accounted Repeat tenant design. fourth of rent of acquisitions by quarter granular steady. portfolio X,XXX holding very highly top and eight property remained the our our in for in for diversified of XX% Our base quarter.

pipeline X% or Over penetration. resulting staff billion increased our already the over XXXX, by $X than market from and increased very course of strong more grew

It with Scottsdale. businesses. customers and clients far biggest The them companies incredible event of team and on held long-term the insights over actionable speakers value Our and for and here of access XXth in financing our Adding attractive financial are way best to Conference, was discuss that need call solutions. end results. Cathy continues to important we from plenty our With offered larger our help Inside event grow market January in to Customer lineup opportunities so Forum, third among their to in our up of attendance Track middle items the turn is to of and will the identify effective our top-notch that I that, XX%. a Annual

financing balance Thank volume borrowings and followed combination fourth and program. flows activity quarter for fourth XXXX. you, Then acquisition ended and December cash We activity. I'll Mary. strong equity XXXX. with for additional quarter our the our of our performance our our begin review year Starting by I'll proceeds operations, guidance a ATM from by from with financial funded our XX, financing discussing sheet,

continues an of our the our business effective a especially of given ATM lot and sense size way to and transactions. Our makes raise to the equity us, for in flow be program of granular

we X.X over share, During of average quarter, million at per million. raising sold shares net proceeds the ATM $XXX of our fourth $XX.XX equity an under common price just

issued that approximately net notes the outstanding first year under Funding on of our to notes. to prepay was Berkshire including were past fourth an of raised pay issuance strategically ever in investment. aggregate million without facility. debt exception. borrowings course which scheduled October the of ATM, the used the In million the quarter million $XXX net-lease this active through raised $XXX $XXX the STORE to we penalty, rated our to mature million our credit We XXXX, in We in markets XXXX, proceeds Hathaway compares notes no program, including we XXXX, Over of remainder of $XXX equity and also proceeds mortgage Master down and were AAA

X.X%. a these years, result long-term rate XXst, rate laddered. and that It's debt financing debt average at December important under and weighted all are activities well at slightly maturities about X.X are As a our a billion our intentionally maturity stood to of of our interest long-term average of at weighted borrowings fixed $X note

just past annual successfully to and million, maturity is prepayment year debt larger currently our median with Our of October, maturities this Funding out $XXX we XXXX. our under debt notes the Master the extended

little We have debt due years. over coming the very next two

in debt million XXXX. total an extendable is loan $XX maturities $XXX million XXXX, virtually, and of are Our bank all in just term which

basis Approximately XX% EBITDA that the our XX, several was As cost properties XXst, unencumbered up from debt December proceeds ratio deploying selling our end billion or given amount XXXX. on around the management investment substantial are a range our leverage X.X portfolio maturities. XX%. At This the real targeting proceeds to exceeds at asset assets run a pledged debt were XXXX of goal on basis. years, $X.X XX% as target free you've remaining combination net estate our and rate collateral acquire unencumbered the properties Longer with to year, asset approximately our $X flow generate seen at gives end at annual low cash includes XX% we is financing and in of at the debt was gross of The new or secured our times, billion our net an over sales portfolio December real debt past In flexibility. to as debt. ratio our it term, of matures. any estate for of from proactively to us is to repay strategy

than in for feature. we positioned ATM $XXX substantial accordion to available $XXX more the and options We with over on $XXX million of attractive with pipeline have entered million to with access variety plus launched fund investment flexibility, ahead the our we well financing the just $XXX million facility, Also, of available year credit leverage, are conservative large on our XXXX We a November. million opportunities. program

billion million into our estate financing annualized of quarter real a base Now translate $XXX to to properties. and revenues turning to consistent has portfolio representing the estate to in The XXXX. XX% portfolio $X.X million $X.X at representing demand XXXX year generated at increased growth. real million XX, This our financial million, compares stood by December $XXX as performance. At billion, year-end, to properties our X,XXX XXXX. rent our compared X,XXX $XXX total $XXX million, Growing for over ago. increased for solutions to revenues And year Fourth continued and XX% XX% strong revenue $XXX increase to levels. compared were interest an

up non-cash million were a year-over-year XX%. recognized $X.X a charge Excluding year ago, revenues approximately

expenses For the fourth million, $XXX million quarter, up from $XX ago. total year were a

points the X improvements $XX.X can and quarter-to-quarter, X The a expenses, amortization impairments, accelerated costs, amortization expenses expenditures. to significant our costs quarters. on for slightly million million is not basis cost only approximately deferred vary for four compared increased the fourth increase $X.X past platform. year-over-year. the G&A the cash X,XXX year for efficiencies of year. depreciation by the ongoing quarter were scale points $X.X ago. staff of XXst, our basis up portfolio was servicing from eight XX% advantages automation, portfolio due At totaled growth and additions, of financing from process were and and our which quarter The non-cash as assets, offset partially fourth to our to for million fourth and Property and expenses for annual such of the the properties costs a $XX.X property of total million and they're vacant, portion were quarter, property related average Excluding December

and G&A income This a about disposition the financing points for of points, portfolio sale for interest from XXXX. basic expenses, compared XX sale book $X.XX the share the down a and $X.X $X.X also and in quarter activity to or aggregate and from charges XX of to Funding incentives. diluted $XXX in during associated and included consisting quarter fourth of accelerated fourth from the the to AFFO a prepayment $X.XX of XX per Net and amortization increased This notes Master to resulted an AFFO on of deferred charge basic million XX% and revenue book year. a the the the million share of growth income $X.XX AFFO increased share, of of basic compared XX book was an share. per year, costs expense in A year as $X.XX of per per basic compares accelerated gain increase basic our million million $X.XX in Net of diluted million, quarter a XX was diluted share to or income from share XXXX. or $X.XX diluted of in or as Net included million amortization year year STORE This about properties the accelerated $XX.X in share, properties. AFFO gain XX of charge decreased per the properties XXXX, representing fourth with million the $XX dividend $XXX million quarter net year-over-year Property from XXXX $X.X $XXX XXXX, of basic a $XX of of aggregate AFFO to interest $X.XX quarter, a million provisions. XX% to related third million gain and the last Net aggregate average another quarter In compares share $X.X expressed $XXX ago. per year income to financing to basis Funding a and already of amortization to million million $X.XX share, Master an from to the diluted book or per per diluted fourth quarter. for Full to year, sale related non-cash $XX.X delivered net the STORE fourth AFFO XXXX. and prepayments in of increase quarter the expense XXXX fourth related XX% we $X deferred assets share. million basic for $XX For lease in mentioned XXXX. of of net of Chris basis basic million impairment $XX.X $X.X of million in diluted per percentage $XXX to per strong million million $XX of for net an XXXX costs, for an share impairment basis, included provisions to for properties per per aggregate properties. charges or diluted $XX.X from increase million three a million the increased gain nearly consisting the of $X.XX On in and X.X%. ago. primarily non-cash sale compared

share So low by I'll we've dividend our that while since dividend reducing just point IPO XX% XXXX, per and payout our at the same maintaining leverage. in ratio, out increased time a our

turning XXXX $X.XX XXXX. the our and quarter, AFFO XXXX we our to per record of XXXX guidance we're activity outlook guidance billion, projected investment acquisition on Now net of our volume $X.X Considering first of year, $X.XX. the for last announced affirming expect we range to to for November. level enter in for share be as approximately Based our last

to of target Our acquisitions to and X range EBITDA. a leverage the based of in AFFO debt run weighted rate rate guidance X.X is net times a cap X.XX%, times on average on ratio new

before, many quarter. dispositions, weighted tends to capital the to each amount share activities. in both back-end property and be Acquisition times per activity As I've in period market of is and acquisitions, any AFFO said timing the sensitive

share real per rents, share anticipated and plus Our $X.XX related to straight-line income $X.XX per losses to gains plus guidance $X.XX on to approximately $X.XX AFFO as share sales, financing net deferred expected $X.XX compensation to share depreciation items property $X.XX amortization, of per cost estate per or amortization. excluding and of equates XXXX for equity to such

to went to that accounting we've recently that January standard call the I'd effect over turn X, Chris, XXXX. adopted new on note I the into like Before lease

way our in results, we any While have be changes impact our on this financial there we activities don't some significant expect leasing on statements. will to report to the

a January for as XXXX. For XX in and example, reporting our ground the lease be we'll leases of liability X, assets portfolio, right-of-used corresponding XX of

well lease headquarters as our As Scottsdale. corporate per building in office the on

expect tenants tax revenue lease up ground collect to property We'll As our obligated a behalf. that we corresponding similar property the do and payments report to our grossing associated lease this make gross we in for result, impairments. our in of higher form the costs XXXX, up from are on tenants payments with any

are increase required origination small costs a to expense that XXXX, in expenses expect since in G&A previously now certain capitalized. we lease We were

now provide Chris. XXXX will upcoming I'll XX-K filing. in We the call back And turn to our more details

Thank you so much, Cathy.

before year. I the As to want to this call significant of some usual questions, highlight for this and achievements our turning over operator your

leading payout During ratio the tenant external taken share XXXX, the in has includes growth and which realize AFFO believe of investment has our positioned dividend realize one AFFO with yields, and have realized leading the solid continued sector in borrowings, we the together to this lowest sector, per the escalations sector, that per is growth. highest our share to growth are market STORE drivers, internal lease efficiency. which spreads investment sector Add resulted to in our cost leading of to among

achieved dollars and terms in counts. transaction history, our discussed, highest have of the we As investment Mary both levels activity of invested in

Normally Together would of real insert disclosure. contracts from seniority illustrates middle the our to posted customers. that we to to review. the strong which main lease demand investments. for updated arising and Pages presentation, you of of center XX expand illustrating profit service upon asset and and solutions we we earnings occasionally our are efficient our encourage release new appendix minimal studies loss level especially with All annually, on market which case our presentation, our slides three XX, and XX, which larger to estate net-lease today, that the corporate I prepare the past provide In our we

were we thought just cherry probably picking. that You

a on of service specialty histogram elected XXXX. recoveries illustrating insert normalized we since to to asset our So all instead

to loan meaningfully surprisingly, tend distance received better those coverage commercial the also We classes extension is and the Not results of probably actually investment mortgage backed other securities and of traditional and our us recoveries. XX, our On value of we break better asset. compare or senior to our Page relative between to credit be both the asset the on still, and since sales not the initial illustrating gains measure we just cost recoveries down costs. rents to XXXX investment initial are

show on More sale which occupied dispositions property rates over proceeds have importantly, we we growth. cap ability past the at higher rates internal our had investment three property contributes years the sales and reinvest to to cap

know be business model CEO letter, presentation, After was as I year's and end to pack a to important make. we you. an find corporate a part information in to version posted informative. this XXXX this I encourage lease cash retained annual assets. from free incremental year our Our benefits in asset letters from to of of review under-performing updated of year you This growth tenant account just a XX. which these It reinvested the flow, losses every communication updated the to historic internal of recycled how is hope long-term and our complete walk my Page from also escalations, of morning of on internal average tried internal you sales you'll recycling digested and into is since our the and chart disclosure as cash is specially service growth proceeds taking growth sales average XXXX, asset regular lot illustrates our included

an our manager Shourie of him in seen we behalf of is you expect to extensive Directors. Capital. with important to an announcement our the role STORE of all of He founding Oaktree of STORE. distressed of I Capital co-portfolio STORE On knowledge Raj STORES broad excited Directors. perspective, Board the Board Board comes of played returning of Directors to and and our of to Raj Board the Managing Director institutional and a reappointment Finally, are have opportunities

With these questions. to turn call the now I your Operator? over comments,

Malhotra the Instructions] comes Vikram of first Stanley. from Morgan question [Operator And

Vikram. on Kevin for is This

billion, quick it's the acquisition then rest a remember, the in $X.X the was year. was to And that question, to on for guided for call including believe Just I the billion I of remaining regards guidance. you $X.X last what now XXXX. it

So billion, quarter I XXXX should was thinking we $X.X minus acquisitions? just the being of fourth or $X.X be billion as curious,

believe - it for will $X.X sales billion be Cathy. We this is Yes. net believe We XXXX. property of

an - line that So or pretty that increase it in was fell or be your would with it actually in you expectations much what said - be just would before?

The answer sense slight we did is we increase a the than that more targeted XXXX. that for had in

but So, XXXX the the from properties not we're surplus XXXX of into guidance. adding

Correct.

Markets. Metz question Jeremy the And from with comes next Capital BMO

and Maybe and wondering, sourced we've in of a seen markets, quarter. credit that in your the question for impact quarter. of Chris does particularly model just Mary. I'm given some acquisitions? the Obviously fourth the volatility the lot How you in a deals

your even revised exceeded You expectations.

and have the case? in ground an any this the it create opportunity you for to on you did signs So step that was does

Two can obviously, Well. volatility All impact a the potential things, borrower. right. as us

be out. from number, out, borrowed number in but have X.X are have attractive doing that it would debt But we are so equity still the to been the what about added was is might a treasury here add spread XX-year seen the a accretive to we're so XX-year X gapped the perspective, value treasury so closer cost thing the a spreads So - shareholders. - into attractive a market our favorable that widened the to returns as safe would but and on the

the think our market from incredibly concerned for favorable mean what that still I perspective. really I weren't we we do. So,

estate as availability it has lenders volatility that bit to the the As and marketplace, seen looking sale caused the to prior capital to pervasive conservative broker more leaseback keep I the and of spread are far for be brokers estate means what business that assets, in that finance individual mind we XX% less means a the in community to real people which be and looking for transactions, healthcare. think have the little real of doing

or the financing, that dependent a available less more is you've as most said actually us. So, of expensive and that sales financing community, activity for upon that's positive broker and then becomes

about you of untethered falls Appreciate and And other? that, and one look versus what are in that you then, of thoughts the differences there and how each give Chris, for bucket and can sort coverage into leases as us your the portfolio doing within color. tethered in yields rent much

Okay.

my on of It's an XX people I for I best? response of the the freestanding each properties first lease know don't means people the do untethered untethered estate the like to - there had my that that untethered really deals asked basis. the rest investments, it. is. a what if like phone, other. the phone properties real kinds fully of or will on someone lease of was what they independent that describe on choice, is rest the - the the time we And So And so choice question we the are one

goods plenty years Lease we in highly the So in very two have we're for aggregate, there of Toys properties our had office. company are example Toys their were more Mountain, these if Gander And the independent a Us. that be businesses, entirety supplies R' R' were I'm Master if Gander had are level. the King plenty are In Us of ago, of Whereas or sure to on suppliers, I properties which we case that less home of Mountain like Restaurants, profitable. in stores covering Burger owned. they're profitable some fact you're you food upon vacancies a Gander their like from getting and Mountain doing their really they mean dependent not

you our if relying of each education those dependent home hand, are properties other really because you're and so properties an distribution the So, were say anything. them. other were office, and and inter operator independent on not on all the let's There's if given like, early but of dependence tethered on really truly the they exposure, centers on other have childhood properties upon lot looking at choice each other supplies relying the to those a they for not or they

you have or lots inside a is a stand have you're early credit. and XX, lots top alone that, So means these like freestanding credits cadence, can which properties education extension a making and true really, when of of credit our business as provider you which an

in fans exposure, our So rolls is is X.X%. which top you our Whereas up. exposure are it all the which our example retail, if again

those we more to properties so if personally. more to not So up like and us up because we big are number, more going were to having be but are to interdependent, they tend a untethered tethered me

in and technique... So, mix, terms what's the of I give can't you the

the math. done have We

stuff math, do don't do and the most if the mean, done is as stuff I of say the that that the much side, we and on is manufacturing we I've and we that retail I well. untethered do untethered. of most would

support really And would to of rely things say properties so rents. most are not other be that other on doesn't I our to it properties our able or support, to

next the And Instructions] Fargo. from [Operator question Wells comes DeFelice with Phil

regarding comments. of in that expect the follow-up cap - your assets. of dislocation bit heard more would question QX, X.XX%, The you on QX. bit finance, the Little in rate of one-off you've your And stock kind I the a some little difficult and those the comments about ATM uptick to given given kind Funding these average. price of how spreads ever historical Master of to forward relate spreads does issuances best your seen? your Are going current

Phil, to hand I'll and it touch I'll spreads. of rate then Mary, the the this Chris on cap sort for is

we've stable couple cap that heard in rates from rates. So seeing from had X.XX% upward our actually. would as you cap a we could increase Cathy our you side, yes, rate say And I on guidance, to the of X.XX% pressure we're did year guidance cap years for this cap very and on

would quarter we or with year so. that the X.XX% rates I So cap or seeing say in are the

very the in high-Xs sure. we've of So range consistent for been

In of spread. terms the

unsecured, done we're has mix it which that. we've spread the the in a we've in done last of likely do which we've done time from unsecured the in that past. Master debt, mean notes, the Funding to the of which perspective, I most year, debt senior a past, is anybody going is Funding and substantially which from public and having rated share AAA, the Master Because done lion's past, if Yes, first the being debt,

So went our down cost and of actual borrowings last of year, as that. result our spreads a

X.X%. were money we at So get to in that able

we'll between sources sort Given three bandwidth today I'm of cautiously in treasury where optimistic today, the borrowings. those that be of is that

we note that almost liability have you If maturities laddered and debt our neutral. look at asset

for we exposure. So an virtually no interest have rate perspective,

than annual are. our debt are payments flows more Our cash

lowers your efficient it for had be that year in also spreads, capital growth then with that. So, an when we've also you expansion. the last the which the very and to is those candidly rare And And increases there REIT cost to from to our beginning expansions external all joining of your at able a is do spreads have helping be some multiple the more out multiple REITs other of perspective. expansion year, all

acquisition sort of then And formal letter point? for for is, guidance the some lead time or much How process what example are the of this acquisitions? at content is typically like is there

Yes. or there basis, answer a you it is on we is out year I'd for the the which the includes when is answer We but mean significant - really can't December BaX to a November. I of that net yes, number, say sort sales. give see property

we've don't BaX average hand And So doing this have take per $XX we've we $XXX we million full. of the pipeline an or averaging been giving give years be of three transactions are that and month. we're we doing for to business you have continues a of But pace know last been the is that transaction. in north guidance. flow net And million a see at we that transactions when been a do worth that

future, activity kind having foreseeable of for is And activity we and do truly north estimate what you of upon lot to seeing a that estimate, are an continued but certainly giving sustained robust $XXX it So this of having able that kind been certainly - is of an quarter in from million seeing having monthly. well. the pipeline, based as

And the next with Ladenburg question John comes Massocca from Thalmann.

kind disclosure the excellent disposition side of of things. So, on

expect of terms can is in management. kind kind between maybe and property opportunistic what good dispositions into kind XXXX? kind for of on should today XXXX, in dispositions blend to then you number were of And roughly forward also guys look same we going of at you strategic speaking able obtain the a 'XX we As see of rate cap

the from Mary. say coming I on strategic. property would or the from would that XX% it's it's XX%, XX% about start But and opportunistic management I coming balance yes. I'll been only say and so

and So in X.X% we I last a and think a on think had X.X% acquiring slide cap consistent. you'll from that's I - presentation. And - fairly we've that and disposition our was a disposition we years. been at been And have standpoint rate average the rates of three of see we're - cap new over

So for we think and XXXX, I that you'll X.XX% a disclosed see cap rate.

we and Now, management stuff, sell, so sell on. something on that so even everything, that vacant we property includes that's and if our

it's So opportunistic and everything. strategic

have as you to see you years last those that give averages can think I three that consistent the So been there. fairly some

you presentation, can the of our the is. you'll look on the page And year, you the if at XX internal which So see is see annual what numbers. impact appendix, depending growth

was for This XX the for a more starting points it's the interest growth we measure important to positive. So investors, shift basis to the It's is basis management a think It's our portfolio. sort impact rate XX an us incremental do. helps to from adding X.X But a is think example also to to it thing of of It year perspective. positive. meaningful. in not positive it's XXXX, get last be just and important all We which was XXXX, point, points. number huge growth

So dividends. $XXX after worth million had cash this of we free roughly flow year

- year. annual million around around averaging say maturity Our $XXX a let's is debt

can we where better to to then if start that, liability million asset closer that to get or be to than get $XXX $XXX that's you'd be you - So million neutral.

have have positively, generate maturities, than more of cash few you you debt then also can takeaway you enough this risks. measure add and and it and can can So average then if lower you cash reinvest like a your cash - growth you

then, little that but huge around And quarter? a color you number, can it not was give a the this maybe impairment

of We for portion been is retail It establishment. of an This And Cathy. in Dakotas. a a year. a impairment good property vacant the had the it was had

in imperative So quarter. what we that was fourth had

of When - we sell based XX, of what impairments just based is it properties fine, cost. not fan doing a the GAAP, of upon part we're doing we're page statistics on you sales rents. just, case I'm we this business happens So upon which huge in that property give not losses, is that's because the

rate, of rate. So we kind sold of this, we it bought for that we cap cap this had

gets the sometimes see way. the You can sort timing of really in exactly happening. what's But

have impairment. that have in to it. to at a committed willing an So that and And sale targeted you you've it's time, you you're take property for sell point

an not of there missed impairment And so with timing. the in we and the was quarter, because loss quarter won't the asset, Ideally, it you to prior numbers where took loss. on sort of a would sell mismatched loss have sell but the a we you sort asset, I a have you then quarter had an and impairment a next show

we're during given going you disclosure ignore we did So to we be the how just will consequences the we're property that's stuff on and doing made or loss we're that. sales, properties timing there a year how impairment GAAP, on with tell we no give the much - you exactly from

make that hope that I makes sense. Does sense.

very Thank me. much. from it you That's

from Haendel comes St. question next the And

Juste with Mizuho.

in market, you be at on all? your the XXXX. In move to core two of follow-ups question guess market, assets the or closing - I'm I cap that curious the pricing light year's perhaps, in late then, I'm the on I So, in pretty more curious availability rates, you in light non-core a do transaction putting guess and of on on you're the asset cap this the might and well more how if the increase capitalize seeing ratios move-ins, impacting full to you last expect market. rates in your move look as Do And an rates. impact market interest at sellers move

This Mary. is

mentioned, I an seen pipeline. we as So have our increase in

$X up So, billion. was X% it or year-over-year

of that have couple we done the attributable direct really had side just of that a Some to that staff a is job. on good additions

of their some people putting just think market and market. you're are to it what penetration, I properties where the on And is speaking

that fair. that's think I So

increased and a seeing opportunity opportunity. of are lot We

that see XXXX. to continue into we'll think I so And

you the it, - might I what move mention cap quarter. not assets where during I'm most if the but seen of have Did missed sure types you rates

And mention that. did - I We

didn't of terms We in asset cap rates. by look it asset at what

cap band really narrow have have We anyways, rates. very a

maybe X-ish. So in terms over of

value. narrow. So we can ended and pretty XX over role of because cap would I some say in know, up there points adding XX paid overall of the is at But the our as quarter. we to range plays rate a you're for basis go that you construction get X for and Construction value

So probably...

kind to there's idea, nothing in have that's We the and not a desirable kind from is People to seeing of properties. year. be away XX beginning the in for last saw the X's, going and We're at guidance particular the assets certain retail distribution moving X's year. any rush nothing of so, decent and we the of

So we've we've cap is seen that and still compress seen seen people, industrial trend properties there. still We've trend rates that there. is

haven't we anything new. of retail seen So the outside of it's anything but like that, but sort movement,

higher maybe and cycle curious of might move late think I for thinking the you're on and to some getting is for but perhaps level that getting And ready perhaps to your curious net then just long building I'm but that. one I'm here - acquisition so certainly mindset just estate cap not in more. we XXXX numbers dispositions a specific the and this The change be if if dispositions term, of on and still to year provide side real expect part guidance, pretty the long a portfolio you're dispositions rates, guidance any I'm curious of should

And - talk for cycle that period a be that point. self see own expansion focus cycle. cycle, must So I addressing, and and of time the and the been we we gets long would the from lot cycle, that this my don't we've the at from that this of is I has of end notes near thing getting somehow on industries the say first about notion the this in economy the analysts would of been a

think this that of X% can there's plenty margin, a activity I at X% grow recession to happening. that's inside but at economy X%, that of X%

in and shoes the have recession, retailers mean were Sears you thought for if working one would you you have was X,XXX for So Roebuck RadioShack any I a if price were there thought Payless a might of you recession. working are closed you pretty there Dakotas were are and of right. you A industry, oil And recession. elsewhere. felt thought was as located fewer you in toward prices the bad, you the in in plummeted those oil have states, a would one

there of happening that inside that. to of kind growth creative of X% is in a lot buried X% So destruction that's that's

buy the perspective, at If from buy able new able X's assets to replace. to a we're cap from still assets at buying, which less properties to that for generating we be we're return can look you still than cost rates a We're that they business. are high get

returns we in not the So properties to not that, from providing - I rent this we've modifiable, assimilable, term choice I X's either a we're bank that getting up are and or so either rates real we're can, they estate it's company that all. financing it's a and there some at or these mind no can for there's not their price not our properties penalties prepayment which the - at out high get cap got mean, decent having we're it whether cap not people have turns their help for them keep all. it and we're that We're assets paying it's people should the not not that till inflexible, properties. assignable, fixed really I mean doing business cycle to mean the mean rate. movement cycle and with it's to relative our started is their is to to that and estate the really associated long there major actually it. suggest it, that X's look not time it's say of what I it's real no able XXXX has not business. it's it, what mean same own businesses lower providing rates capital in been had want because to we in generate, finance not, I a heated there's today, the you our one or like to into low that not and - had actually to

company So real huge your of average they landlord a market be And estate question the who us, And landlord. especially have their there saying needs decided their we our to much, much intensive a they your if than and want and would it's they have middle any banker. size real we're is should as estate then their rather landlord. raising have hands they

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that the debt at portfolio, maybe to investment we portfolio. mean this ship STORE know to the that - are were mean for if that. on because you'd curve our STORE can I in than our unsecured scores absolute XX% or to than I us of of grade the not debt that higher XXX% of revenue contracts appendix our growth you internal have. under the rate the all example, losses in so right represents that right. grade are the investment doesn't And were and you mean and the look you Because higher loss solidness walk you we I say out to score the back in quality look is realize mean it's just over type

people's a notion like we'll recession lot everybody but else, I If have get driven. really cycle say, we're we we'll I hurt just less, And own because we the hurt would a get so dispute profit would centers. that

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with comes next from Chris Capital the And One Lucas question Securities.

a at going got discussing. just Just is me appears been run can on the probably to that your guess what taking free low payout for sort a your question time. access I dividend go as year flow least those following as to levels Any up it leverage sizable it cash counter probably year every of lower, equity quick a were great. of a you thoughts you've probably period of has through to

a privately, like I a that a to I mean you at investment mean, analyst, we're entirely comfortable X you when X.X performing is it's at answer private to could person, on not there that's harnessing to double rating argue, space might that I levels times and portfolio, The leverage very we And pretty portfolio if that essentially leverage might you're have looking number. they're you portfolio if It's, technology that an Trust created XX%. in public you're and them mean fact, the who entering the XXXX companies out argue, like in there are are of lease high type this. net to are assets leveraging there Master XX%, grade

leverage REIT that cost lower we're so, smoking our XX% anybody and than and down capital a space. incredibly to our levered less argue XX% leverage return. pushing XX% our position today and rise further, be unsecured on raise is unsecured help basically our in which with the in think people most low of leverage at I I we're our the mean might leverage just to And still would else shareholder I our our is

So in I think from where the solid. that we bandwidth we're is is today it pretty are

like session. back turn this And Chris for closing I'd any question-and-answer you. Thank to concludes Volk, the to comments. conference the

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concluded. Thank Thank conference you. is you for The now attending.

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